Proposed law could take e-commerce firms to task over unfair trade practices

Proposed law could take e-commerce firms to task over unfair trade practices
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A proposed consumer protection legislation is aiming to make e-commerce firms more accountable for unethical and unfair trade practices such as selling defective goods.

The Consumer Protection Bill-2018 was cleared by the Lok Sabha on Thursday and is currently pending in the Rajya Sabha. Once passed into law, it will replace the existing Consumer Protection Act, 1986.

The Bill, among other things, seeks to regulate unfair trade practices in direct selling as well as e-commerce while protecting the rights of consumers.

Misleading consumers on pricing and false representation of quality, quantity and service standards are among the parameters defined under unfair trade practices in the Bill.

“The emergence of global supply chains, rise in international trade and the rapid development of e-commerce have led to new delivery systems for goods and services and have provided new options and opportunities for consumers,” stated one of the provisions of the Bill. “Equally, this has rendered the consumer vulnerable to new forms of unfair trade and unethical business practices.”

It further stated that misleading advertisements, tele-marketing, multi-level marketing, direct selling and e-commerce have presented new challenges to consumer protection and require appropriate and swift executive interventions.

In a move that aims to bolster consumer protection, the bill has also provided for the establishment of an executive agency to be known as the Central Consumer Protection Authority (CCPA) that will promote, protect and enforce the rights of consumers.

As part of its roles and responsibilities, the CCPA will help consumers in initiating class action that includes enforcing recall, refund and return of products. Prior to this, there was no institutional mechanism or a vested authority to address these issues, the bill observed.

The CCPA will constitute a chief commissioner and other regional commissioners.

Separately, there have also been efforts underway to introduce an e-commerce policy to bring about uniformity in the sector.

E-commerce is currently dealt with by several pieces of legislation such as the Information Technology Act, 2000, the Foreign Direct Investment (FDI) Policy, the Goods and Services Tax Act, and consumer protection laws

A draft e-commerce policy framework put out earlier this year sought to establish a uniform definition of e-commerce and address issues related to data storage, creating financial infrastructure and boosting the sale of domestically-produced goods through online platforms.  

While the first draft of the policy went into abeyance after multiple iterations, Union commerce minister Suresh Prabhu told Parliament earlier this week that though an e-commerce policy was being considered, no deadline had been fixed in this regard.

In April and July this year, consultations on the draft national policy were held with representatives from government ministries, the Reserve Bank of India, industry bodies, and e-commerce, telecom, IT and payment companies.